How to Handle Incorrect Payment From a Client [Email Templates]

You are here:
Blog summary

Handling incorrect payment is a delicate task that can ruin your relationship with the client if done unempathetically. Thus, read on to find out how to do so and prevent it from happening again.

As a business owner, receiving incorrect payments from clients can be frustrating and time-consuming for you as it can:

  • Lead to cash flow problems
  • Disrupt your billing process
  • Damage your relationship with clients

Thus, it’s essential to handle them in a timely and professional manner to minimize their impact on your business.

So, in this blog post, you will get to learn how to handle incorrect payment from client such that it doesn’t burn your bridges. And to make it easier for you, we will provide you with sample email templates so you can get an idea or steal it outright.

Apart from that, you will also know how you can prevent yourself from getting into this uncomfortable situation again. Let’s start with that:

What are Incorrect Payments and Their Causes?

An incorrect payment means that you didn’t get the exact amount from a client for which you have sent an invoice.

For instance, billing Martin for $1000 for a plumbing service and him paying $800 by the end of the due date is a case of incorrect payment. And by the way, if he mistakenly pays you over the billing amount, let’s say $1100, then this also is an incorrect payment.

Now, for the sake of clarity, understand the difference between non-payment and incorrect payment:

Non-payment Incorrect payment
The client fails to provide you with any payment by the end of the due date. The client pays you something but not the exact amount in the invoice (usually lesser). You can also call it a partial payment.
Usually takes more time and effort to resolve. Comparatively, lesser of a hassle to deal with.
It can strongly affect the business’s cash flow and the client relationship. It may meekly affect the cash flow and client relationship.
This can happen due to disputes, malicious intent, financial difficulties, or simply forgetting. This can happen due to unclear payment terms, mistakenly entering the wrong amount or financial difficulties.

Causes of incorrect payments

  • Data entry errors
    Many a time, this is just an honest mistake from your client’s side. So it may happen that a client may have entered the wrong amount while making your payment.
  • Incorrect invoice
    The surprise of the wrong payment amount received can also be due to you being the culprit of making a calculation mistake.
  • Currency conversion errors
    If you are dealing with an international client, it may send your payment in a different currency than the one specified by you, leading to an incorrect conversion.
  • Payment disputes
    Sometimes, the client may feel that you have billed them outrageously or added some “hidden” charges to the invoice. This can result in a dispute and the client paying you incorrectly.
  • Multiple payments
    The occurrence of multiple payments is common these days, which can happen due to human or technical error.
  • Financial difficulties
    What if the client is unable to pay you the total amount of your invoice currently? So instead of making a late payment, it resorts to making a partial payment.

Reduce Invoice Errors With InvoiceOwl

Try our reliable invoicing software for free, which digitizes your invoicing process and reduces human errors.

CTA arrow

Whatever may be the cause, you need to handle this issue (… graciously). This brings us to the crux of this blog.

Step-by-Step Process to Handle Incorrect Payment From a Client

Handling this issue need not be as uncomfortable as it looks. Thus, follow along to get the correct payment:

Step 1: Acknowledge and confirm

Have you found any probable case of incorrect payment from a client for your business? Then don’t just rush to blurt out to your client and demand it to pay you fully instantly.

Sometimes it may happen that you have been mistaken about a wrong payment. And quickly reaching out to your client without confirming it can turn a relationship sour.

So, first of all, make sure that an incorrect payment has happened. How?

  • Check the invoice you have sent to your client to see if it was correct.
  • Take a second look at the payment terms you have made.
  • See if you (or your accountant) have made any calculation mistakes.

Have you found any discrepancy in the invoice payment made to you? If yes, then move on to the next step.

Step 2: Find the root cause of incorrect payment

This step is important to resolve this issue smoothly. So find whose mistake it is actually – yours or your client’s.

    Pro tip: In both of these cases, it is you who needs to maintain your calm because unnecessary anger will only delay your payment further, having you to make more effort for it.

Upon finding the culprit, you also need to find the root cause that has led to this situation. This will help you clarify it to your client.

So what’s the cause of this incorrect payment? Is it anything from the list we have mentioned above?

Anyways, found it? This takes us to the 3rd step.

Step 3: Contact your client to solve the issue

Here comes the tricky part – making the client aware of the situation and convincing it to make the additional payment. But don’t worry, here is an email template that you can send:

Incorrect Payment Invoice Template

Subject: Request for Correct Payment

Dear [Client Name],

I hope this email finds you well. I am reaching out to you in regards to Invoice [Invoice Number], for which we recently received payment of [Payment Amount Received by You].

Upon further review, we noticed that the payment received was incorrect and did not match the total amount due on the invoice, which was [Payment Amount That Should Have Been Made].

I kindly request that you make the due payment of [Amount Yet to be Paid] as soon as possible for Invoice [Invoice Number].

The reason for this, as I found out, is [Reason]. And we are working on minimizing such causes to avoid any inconvenience in the future. Please let me know if there is any confusion or information that I can provide to assist you in this matter.

Thank you for your prompt attention to this matter. I look forward to your response and the due payment.

Best regards,

[Your Name]

You can even add an attachment of the updated invoice mentioning the amount paid and the amount due.

So are we done with this process? Not quite yet. Not until you receive your payment and have worked to mitigate the root cause.

Often, getting your due payment is a matter of sending just one email. But sometimes, you will need to nudge your client a bit more with regular reminders. Here is a reminder email template to give you an idea:

Reminder Email Template

Subject: Reminder #[Reminder Number] for Correct Payment

Dear [Client Name],

This is a reminder to make the due payment of [Due Payment Amount] as mentioned in our previous email.

I understand that life can get busy sometimes. But please look into it and do the needful as soon as possible.

If you need assistance or have questions, please do not hesitate to reach out. I look forward to your response and the corrected payment.

Best regards,

[Your Name]

If the client fails to respond or pay, it’s best to cut off your services to it until the issue is resolved (and inform the client about it).

Step 4: Update your data

Got your money? Now it’s time to update your records to make it clear to all that the issue is resolved. Why?

Because it is very frustrating for the client to receive constant reminders for which it has already cooperated. This shows your carelessness for your client’s precious time.

Step 5: Appreciate the client’s cooperation

A little appreciation can go a long way in your client’s heart and cool off the little heat produced in this situation. Here is a small email template that you can use:

Appreciation Email Template

Subject: Your Due Payment is Received

Dear [Client Name],

We have received your payment. I highly appreciate that you looked into this matter to quickly resolve it. I assure you that our team is working to minimize such inconveniences for you.

Looking forward to having a prolonged business relationship with you.

Best regards,

[Your Name]

Now, let’s take the final step.

Step 6: Prevent the cause from happening again

It isn’t enough to say that you are working to prevent such situations in the email. You need to actually do it because nobody likes suffering from repeated mistakes.

Here the cause that you identified in step 2 will help you to prevent it from ever popping again. 

And since we are talking about prevention, let’s dig deeper into it.

How to Prevent Incorrect Payments From Happening in the Future?

Why just tackle one root cause at a time as it happens? Instead, it is much more rewarding to go the extra mile and remove all the probable causes due to which it can happen. Here is how:

  • Clearly define payment terms in writing
    Be transparent about your terms and expectations. This includes: 
    • Payment amounts
    • Due dates
    • Any penalties for late payments
    • Currency accepted
    • Payment methods – Cash, credit/debit card, check, etc.
  • Systemize your payment system
    If you have a clear step-by-step system for your team to follow, it will make sure that everything is double-checked. A little tip for you is that you require your team for your approval on an invoice before sending it to your client.
  • Use an invoicing software to reduce human errors
    Invoicing software such as InvoiceOwl greatly reduces the human intervention needed to create invoices. This resulted in more accuracy and saved time.

Creating Complex Invoices Simplified With InvoiceOwl

Create, send, and manage invoices with less effort and more accuracy. Try InvoiceOwl for free to see how.

CTA arrow
Frequently Asked Questions
  1. What to do if a client has overpaid?

    In case of overpayment from your client, don’t automatically consider it as a tip for your service and move on. Bring it to his attention and repay the excess amount you received.

    Such honesty towards your client can ensure that you aren’t just for money but to provide value. And that makes a huge difference.


  2. How frequently should I send reminder emails?

    It is advisable to keep yourself away from just firing reminder emails like a machine gun.

    Instead, go for the shotgun approach. That means giving the appropriate gap of at least a few days between each email you send for the same issue.


  3. What steps can you take in case of non-payment?

    Here are a few things that you can do in this case:

    • Stop providing any further services to the client
    • Have your attorney send an email on the issue
    • Hire a collection agency
    • Approach the small claims court

Conclusion

We have a few pieces of news to share with you at last – one of which can be a bitter pill for you.

The bad news: In business, you are likely to find yourself handling such cases often where you received an incorrect payment amount.

The good news: Most of those instances will be easy and quick to tackle and won’t require you to knock on the doors of a court or even your attorney.

The even better news: With the steps and email templates we have provided you, handling this will be even easier for you.

So relax and just start with Step 1 above.

Author Bio
Jeel Patel
Jeel Patel
Founder

Jeel Patel is the founder of InvoiceOwl, a top-rated estimating and invoicing software that simplifies the invoicing and estimating processes for contractor businesses. Jeel holds a degree in Business Administration and Management from the University of Toronto, which has provided him with a strong foundation in business principles and practices. With understanding of the challenges faced by contractors, he conducted extensive research and developed a tool to streamline the invoicing and estimating processes for contractors. Read More

India

Tiruchirappalli

IN